ECON203-LAB4-Q8

# ECON203-LAB4-Q8 - Question 3[14 points A simple...

• Lab Report
• 1
• 100% (1) 1 out of 1 people found this document helpful

This preview shows page 1. Sign up to view the full content.

This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Question 3 [14 points] A simple mao'necnnomit: system is described below Assuming the system lollows the aggregate expende model, please answer the questior‘s that follow. C = consumption expenditure Co = autonomous consumption expenditure 5 = marginal propensity to oonsu me (M PG) Yd = disposable lncome NT = net taxes I = tax rate In = investment expenditure G“ = government expenditure X - exports IM mports IMO = autonomous imports rn = marginal propemityto import (MF'M) Y = real GDPﬁn-me a) Calculate the equilibrium level otincnme. Keep as much precision as possible during your talculatiens. Your ﬁnal arswer should be accurate to the nearest dollar. Equilibrium = 52,023 b] What is the multiplier for government expenditures? Thai is, increasing govemment expenditures by \$1 increases the equilibrium level of lnccme by how much? Keep much preclsion as possible during your calwlalions. Your ﬁnal answer should be acou rate to at least two decimal places Government Multipller = 2.32 a) Suppose that the potential income for this economy is 53,31 3. What change in government spending would ellrninane this gap and bring the economy back to equllibrl urn? Keep as mud! precision as posslble during your calculations. Your ﬁnal answer should be accurate to the nearest dollar: Govemmenl Change = \$ 55 Marklnn: ...
View Full Document

• Winter '08
• Islam
• Macroeconomics, government spending, nearest dollar, consumption expenditure, autonomous consumption expenditure

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern